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How to Calculate the Potential Value of Better Keyword Rankings

In today’s post, we’re going to look at two ways to estimate the potential ROI of better keyword rankings.

Sometimes it’s hard to get a client to invest in something they may not see the immediate value of. A search marketing campaign is often one of these things. But with the right tools, you may be able to calculate potential value of increasing a website’s ranking in search. In today’s post, we’re going to look at two ways to estimate the potential ROI of better keyword rankings.

What You Need to Know to Get Started

The first thing you will need to know is the click through rate for SERPs. In 2011, a study published by Optify shows the click-through percentage for websites ranked in the 1st through 20th position in search results.

This means that being first makes a big difference, along with the fact that being in the top three means you gain almost 60% of the clicks from search.

Next, you will need the number of monthly searches for a keyword. While you can get this from Google AdWords, it’s good to note that this is an estimated amount, not an exact one.

This is something you’ll have to be clear about, otherwise you or your client will be mislead into thinking that you’ll get exactly 36.4% of 450K searches which could lead to disappointment.

Using Google Analytics & Goals

If your website has Google Analytics installed with goals set up (preferably to a monetary value), then valuing your potential search traffic. It’s not perfect, especially now that (not provided) is dominating organic keywords, but it can give you some ideas.

The process goes like this.

Go to your Traffic Sources > Search > Organic.

Change the date to the last year or other time period you want to measure.

Change the Explorer view from Site Usage to your Goal Set.

Change the Show Rows dropdown at the bottom left to 500.

Export download your keywords with matching Goal data to CSV.

Delete everything in the CSV that isn’t part of the Keyword through Goal Conversion Rate columns.

Sort your data, first by the Goal Conversion column that represents your website’s conversion revenue and then by Visits.

Now, you should be looking at the keywords with the highest conversion rate in order of the ones that receive the most traffic. Start highlighting the ones that it makes sense to target leaving out ones that not necessarily relevant to your brand or branded keywords that you already rank #1 for.

Let’s say that one of the keywords you came up with was social media tips, and you conversion rate on this keyword is 60%. For each conversion, your business makes $50. You look this up in Google AdWords Keyword Tool to find that there are 9,900 estimated global monthly searches. You check your rankings for this keyword, and you’re not even on the first page. If we use the chart of SERPs click through rate, then here’s what you would be looking at if you were to rank on the first page of search results.

Not too shabby! And this doesn’t even count the number of times social media tips was searched for but ended up in the (not provided) column.

Using CPC

Another great way to explain the value of an organic search ranking is to see how much it would cost to acquire clicks through paid advertising. If you have a Google AdWords account, this information will show up next to the keyword in the Approximate CPC column. If not, you can find it using SEMrush. You can take the same spreadsheet from earlier and just do a few modifications to estimate the cost of gaining that traffic. And if you have the goal values and conversion rate from GA, you can look at your profit after paying for the clicks.

As you can see, it’s worth it to invest in an organic search campaign and continuously build up to #1 or as close as possible. And depending on the keyword phrase and it’s CPC value, it could be a staggering loss of profit to pay for search advertising.

The Flaws

Are there flaws to predicting the potential value of higher search rankings? Of course, there are tons of them. The conversion rate might drop as the the number of visitors increase. The website might not have a specific conversion value set up in which case you have to use averages. The huge hole of (not provided) could be making you miss valuable keyword phrases. Because Google Analytics only tracks conversions based on the current visit, you might miss conversions on keywords where the person originally visited via keyword search on Google but came back again to buy as a direct referral.

The point being, this is a good way to show potential value to clients (and yourself) when determining what keywords to really go after with your search marketing.

How do you determine the potential monetary value of higher keyword rankings in search? Please share in the comments!

2 responses to “How to Calculate the Potential Value of Better Keyword Rankings”

“Not too shabby! And this doesn’t even count the number of times social media tips was searched for but ended up in the (not provided) column.”

Is this true? I’m fairly sure the Adwords Keyword Tool returns an estimated total search volume without adjusting for (not provided).

I’m irked by the 60% rate on a $50 conversion. Is this real data? If so, a congratulations is in order to whoever built that landing page. I would also question the SERP CTR stats from 2011. It might be a good starting point, but I’m not sure I would feel comfortable making (or advising) large financial decisions based on old data.

It’s more of an exaggerated example than a real world model. I played around with different numbers. Since I work for some companies that have conversions in the 1,000 – 10,000 range, I thought $50 was a low average whenever they get a lead.

Thanks for the heads up on the misspell too. Analytics always gets me. 🙂